One of the most obvious signs that your company has, or is about to face a cash flow problem is when your sales income is insufficient to cover your operating costs.
An obvious statement, but a position that most companies find themselves in by not planning ahead and by not regularly monitoring the company’s finances.
Some of the most common questions that we are asked are summarised below:
- We can’t afford to pay our creditors
- We’re struggling to pay this week’s/month’s wages
- Our company can’t pay its bills
- The company is running out of money
- Our bankers are applying pressure to reduce our borrowings
All of the above have one common theme – an immediate problem that needs resolving now.
The cause of any of the above points, usually stems from the fact that directors have been too busy sorting out other problems and have failed to keep a careful eye on the finances. In some cases, it may be that one of your customers themselves are experiencing some financial difficulties of their own, thereby causing them to delay payments to you.
In order to prevent arriving at the questions above, it is imperative that you have at least some idea of your likely cash flows over the next three months as a minimum. That way, hopefully, you will at least be able to spot where potential problems may arise and take steps at a much earlier stage.
If you are now in a position where your company cannot pay its creditors or wages, or indeed is coming under pressure from your bankers, then you should call us immediately. We will be able to advise of exactly what you should and should not be doing, whist we review with you all of your options.
Short Term Cash Flow Solutions
If your cash flow position is of a temporary nature, we may well be able to arrange additional short term finance to enable you to work through this position. We have excellent contacts with a number of national finance organisations, including high street banks and asset backed lenders and factors.
Long Term Cash Flow Problems
If the problems are more serious, then you really do need to take specialist insolvency advice, to ensure that you carry out your duties as a director correctly and do nothing that may give rise to a claim against you personally.
Again, with our extensive experience in all aspects of turnaround and formal insolvency procedures, we can offer you immediate, concise professional advice.
If for any reason, your company is experiencing cash flow problems and you want some immediate no nonsense professional advice, then call us for a confidential chat.